Bangladesh Nears Approval of Next IMF Loan Tranche

Bangladesh is set to receive $1.3 billion from the International Monetary Fund (IMF) after the central bank committed to adopting a more flexible exchange rate regime, according to a senior official. This breakthrough ends a months-long deadlock that had delayed the disbursement of the fourth tranche of a $4.7 billion loan agreement made with the IMF in early 2023. The release of the funds had been held up due to Bangladesh's failure to meet key reform targets, particularly the adoption of a more market-driven exchange rate.

Bangladesh Bank Governor Ahsan H. Mansur is expected to provide more details on the matter in a virtual press briefing from Dubai on Wednesday. While an official statement has not yet been issued, a senior central bank official confirmed that the IMF's approval indicates the funds will be released soon. To date, Bangladesh has received $2.3 billion from the IMF in three installments under the Extended Fund Facility, Extended Credit Facility, and Resilience and Sustainability Facility. The fourth tranche, initially scheduled for March, was delayed over concerns about the central bank's slow progress in unifying multiple exchange rates. The IMF has long urged Bangladesh to transition away from its tightly controlled currency regime to ease pressure on foreign exchange reserves and boost investor confidence.